Method and apparatus for payment processing using debit-based electronic funds transfer and disbursement processing using addendum-based electronic data interchange

ABSTRACT

This disclosure describes a payment and disbursement system, wherein an initiator authorizes a payment and disbursement to a collector and the collector processes the payment and disbursement through an accumulator agency. The accumulator agency processes the payment as a debit-based transaction and processes the disbursement as an addendum-based transaction. The processing of a debit-based transaction generally occurs by electronic funds transfer (EFT) or by financial electronic data interchange (FEDI). The processing of an addendum-based transaction generally occurs by electronic data interchange (EDI).

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates generally to the processing of paymentsand disbursements. More particularly, the invention relates to a methodand apparatus for processing payments using debit-based electronic fundstransfer and processing disbursements using addendum-based electronicdata interchange.

2. Description of the Related Art

If an employee owes a permissive or mandatory obligation to a thirdparty, the employee has few options for making recurring paymentsthrough the employer. Presently, most employers do not have thecapability to process payments and disbursements for an employee throughtheir payroll systems. If an employee has a recurring permissiveobligation, the employee may make payments on this obligation throughthe traditional means, such as, for example, payment by cash, payment bya check, or electronic payment through the employee's bank. Similarly,if an employee has a recurring mandatory obligation, such as, forexample, a child support payment, an alimony payment, or other similarcourt-enforced mandatory obligations, the employee may also makepayments on these obligations through the same traditional methods. Ineither of these situations, however, there are few options for anemployee to make payments or disbursements through an employer.

For recurring mandatory obligations, one option is for an employer towithhold an amount from an employee's wages and to make subsequentdisbursement of the amount to a particular receiving entity. Thiswithholding generally occurs as a court-sanctioned withholding, such asa garnishment. For example, there are presently systems that allow thepayment and disbursement of child support obligations from an employerdirectly into the bank account of a state's child support agency. Onepresent system comprises computer software that allows an employer toextract data from any corporate financial application in order toprocess the obligation. The software then connects with an automatedclearinghouse and processes an electronic payment for the obligation.The electronic transaction is a credit-based transaction. In acredit-based transaction, the automated clearinghouse issues a credit tothe state agency based on the amount of the obligation. The bank for thestate agency receives the credit and subsequently issues a debit againstthe bank account of the employer. The automated clearinghouse receivesthe debit from the bank of the state agency and processes the debitagainst the bank of the employer. When the amount of the obligation issatisfied through the automated clearinghouse, the credit held by thebank of the state agency is satisfied by the debit issued against thebank of the employer. Another present system performs similaroperations, but the system functions only on its own proprietarysoftware. These current methodologies for payment and disbursementprocessing are inefficient and undesirable based at least on threegrounds.

First, the current methods for payment and disbursement processingrequire that employers use credit-based transactions. These transactionsinvolve numerous interactions with an automated clearinghouse, whichinvolve both financial and temporal inefficiencies. A credit-basedtransaction is financially inefficient because this type of transactionrequires more interactions with an automated clearinghouse. Each timethat a transaction passes through an automated clearinghouse, aprocessing fee is charged. Also, a credit-based transaction istemporally inefficient. Because a credit-based transaction must passthrough an automated clearinghouse in multiple incantations, this typeof transaction takes more time to complete.

Second, the current methods for payment and disbursement processing onlyallow the processing of one financial transaction at a time. Thisinefficiency results because the current methods use a payment formatthat is limited to one financial exchange per payment or disbursementtransaction. For all electronic transactions with an automatedclearinghouse, there are four available formats: cash concentration ordisbursement (CCD), cash concentration or disbursement plus addenda(CCD+), corporate trade exchange (CTX), and corporate trade payments(CTP). The current systems utilize the CCD+ format, a combination of theCCD format and an addendum. The CCD+ format is limited to a singleaddenda record and is thus limited to one payment and disbursement pertransaction. An addenda record enables the exchange of electronicpayments as well as payment-related information through financialinstitutions over an automated clearinghouse network. In contrast, theCTX format allows one electronic payment to cover multiple obligations,therefore including up to 9,999 addenda records. The CTP format utilizesa distinct combination of addenda records, but the CTP format wasdiscontinued effective April 1996. Therefore, because the currentsystems only utilize the CCD+ format, they can only process transactionsone at a time.

In addition to these financial and temporal inefficiencies, the currentmethods also contain inherent structural inefficiencies. The currentmethods for payment and disbursement processing all require a bank bothat the beginning and at the end of each financial transaction.Accordingly, these systems do not allow the employer to initiate afinancial transaction to a recipient directly through an automatedclearinghouse. Instead, the systems require that an employer initiatethe financial transaction at a bank, that the bank process the financialtransaction through an automated clearinghouse, and that the automatedclearinghouse complete the transaction between the employer and therecipient. For the current systems, these processes include multipletransactions through the automated clearinghouse. These structuralinefficiencies inure due to the inability of the employer to initiate orprocess electronic transactions through an automated clearinghouse.

The inefficiencies and other shortcomings in the current methodologiesfor payment and disbursement processing reflect undesirable diminutionsin capacity and quality that could be achieved by further development ofimproved payment and disbursement processing methods. Thus, the currentpayment and processing methods reflect an unsatisfactory development ofmethods and systems to process both the permissive and mandatoryobligations of an employee by an employer and subsequent disbursement toan intended recipient.

SUMMARY OF THE INVENTION

The present invention is directed to a method and system that obviatesproblems due to the limitations and disadvantages of the prior art.

It is an object of one embodiment of the invention to provide a systemwhereby a collector of funds may easily process a payment and adisbursement.

It is another object of another embodiment of the invention to enable acollector to transmit an electronic payment and an addendum-based fileto an accumulator agency for processing.

It is still another object of another embodiment of the invention toenable an accumulator agency to receive an electronic payment and toprocess a payment as a debit-based transaction.

It is yet another object of another embodiment of the invention toenable an accumulator agency to receive an addendum-based file and toprocess a disbursement based on the addendum information.

To achieve these and other objects, and in accordance with the purposesof the invention, as embodied and broadly described, one aspect of theinvention includes a method of accumulating a payment and processing adisbursement. This method comprises initiating a payment withdisbursement information from a payee to a payee through a collector;transferring to an accumulator agency the payment and the disbursementinformation from the collector; processing from the agency the paymentas a debit transaction; and processing from the agency the disbursementinformation as an addendum transaction.

A further aspect of the invention includes a method of processing apayment. This method comprises receiving payment information at acollector; sending the payment information from the collector to anaccumulator agency; receiving at the accumulator agency paymentinformation from the collector regarding the payment; and initiating bythe accumulator agency the payment as a debit transaction.

Another aspect of the invention includes a method of processing adisbursement. This method comprises transmitting by an accumulatoragency disbursement information to an intermediary; receiving at theaccumulator agency disbursement transaction information from theintermediary regarding authorization for a disbursement as an addendumtransaction; and executing the disbursement to a recipient.

Additional aspects of the invention are disclosed and defined by theappended claims. It is to be understood that both the foregoing generaldescription and the following detailed description are exemplary andexplanatory and are intended to provide further explanation of theinvention as claimed.

BRIEF DESCRIPTION OF THE DRAWINGS

The accompanying drawings are included to provide a furtherunderstanding of the invention, are incorporated in and constitute apart of this specification, illustrate preferred embodiments of theinvention, and, together with the description, serve to explain theprinciples of the invention.

In the drawings,

FIG. 1 is a block diagram of a payment and disbursement processingsystem;

FIG. 2 is a block diagram of a debit-based payment processing system inaccordance with one embodiment of the present invention, as shown inFIG. 1;

FIG. 3 is a block diagram of an addendum-based disbursement processingsystem in accordance with one embodiment of the present invention, asshown in FIG. 1;

FIG. 4 is a block diagram of a payment and disbursement processingsystem, in accordance with a preferred embodiment of the presentinvention, as shown in FIG. 1;

FIG. 5 is a block diagram of a collector, as shown in FIG. 1;

FIG. 6 is a block diagram of an accumulator agency, as shown in FIG. 1;

FIG. 7 is a block diagram of an intermediary/recipient, as shown in FIG.2;

FIGS. 8A and 8B are samples of the contents of the financial electronicdata interchange database and the electronic funds transfer databasestored in the collector terminal shown in FIG. 5, the accumulator agencyserver shown in FIG. 6, and the intermediary/recipient terminal shown inFIG. 7;

FIGS. 9A and 9B are samples of the contents of the electronic datainterchange addenda database stored in the collector terminal shown inFIG. 5, the accumulator agency server shown in FIG. 6, and theintermediary/recipient terminal shown in FIG. 7;

FIG. 10 is a block diagram of a payment processing system, in accordancewith the preferred embodiment of the present invention, as shown in FIG.4;

FIG. 11 is a flow diagram of a method for initiating a payment, inaccordance with the embodiment of the invention, as shown in FIG. 10;

FIG. 12 is a flow diagram of a method for implementing paymentprocessing, in accordance with the embodiment of the invention, as shownin FIG. 10;

FIG. 13 is a block diagram of a payment processing system, in accordancewith an alternative embodiment of the present invention, as shown inFIG. 2;

FIG. 14 is a flow diagram for a method for initiating a payment, inaccordance with the embodiment of the invention, as shown in FIG. 13;

FIG. 15 is a flow diagram for a method for implementing paymentprocessing, in accordance with the embodiment of the invention, as shownin FIG. 13;

FIG. 16 is a block diagram for a payment processing system, inaccordance with another alternative embodiment of the present invention,as shown in FIG. 2;

FIG. 17 is a block diagram for a disbursement processing system, inaccordance with the preferred embodiment of the present invention, asshown in FIG. 4;

FIG. 18 is a flow diagram of a method for disbursement processing, inaccordance with the embodiment of the invention shown in FIG. 17;

FIG. 19 is a block diagram of a disbursement processing system, inaccordance with an alternative embodiment of the present invention, asshown in FIG. 3;

FIG. 20 is a flow diagram for a method of disbursement processing, inaccordance with the embodiment of the invention shown in FIG. 19; and

FIG. 21 is a block diagram of a disbursement system, in accordance withanother alternative embodiment of the present invention, as shown inFIG. 3.

DESCRIPTION OF THE PREFERRED EMBODIMENTS Introduction

The system of a preferred embodiment of the invention avoids theinefficiencies and shortcomings of the prior art payment anddisbursement methodologies by integrating the collection of payment anddisbursement information by an employer and transmitting the informationto an accumulator agency. The accumulator agency then processes thepayment as a debit-based transaction and processes the disbursement asan addendum-based transaction. In this system, all parties benefit: thepayor benefits by the availability of a simple method for payment anddisbursement processing through an employer, the employer benefits by afast and inexpensive method for transmitting payments and disbursementsfrom an employee to a recipient, and the recipient benefits from thetimely transmittal and receipt of a payment. The system is alsobeneficial to disbursement processors because the system allows forefficient transmittal of disbursement information without paymentoverhead.

A preferred system consistent with the invention comprises severalcomponents, including a collector, an accumulator agency, and anintermediary/recipient. From an initiator, the collector receivespayment and disbursement information, which is initially stored at thecollector. The collector maintains a database of payment anddisbursement information pursuant to each initiator. The accumulatoragency serves as a processing station between the collector and therecipient/intermediary. The accumulator agency receives the payment anddisbursement information from the collector, verifies the validity ofthe information, and if valid, further processes the payment anddisbursement. For payment processing, the accumulator agency transmitspayments as debitbased transactions. For disbursement processing, theaccumulator agency transmits disbursements as addendum-basedtransactions.

System

FIG. 1 shows a payment and disbursement system according to oneembodiment of the present invention. System 100 includes initiator 110,collector 120, accumulator agency 130, debit-based payment processing140, and addendum-based disbursement processing 150. Initiator 110,which is preferably an employee seeking to initiate a permissive paymentand disbursement or an employee subject to a mandatory payment anddisbursement, transacts with collector 120, which is preferably anemployer. Collector 120 receives the payment and disbursementinformation from initiator 110, and collector 120 records theinformation in a database and transmits the information to accumulatoragency 130. Accumulator agency 130 verifies and processes the paymentand disbursement information. For payment processing, accumulator agency130 transmits the payment according to debit-based payment processing140. Debit-based payment processing 140 incorporates financialprocessing information. For disbursement processing, accumulator agency130 transmits disbursement information according to addendum-baseddisbursement processing 150. Addendum-based disbursement processing 150incorporates the non-financial information contained within theaddendum.

FIG. 2 illustrates an embodiment of a debit-based payment processingsystem consistent with system 100 shown in FiG. 1. As shown in FIG. 2,debit-based payment processing system 200 includes collector 120,accumulator agency 130, accumulator agency's bank 210, automatedclearing house (ACH) 220, collector's bank 230,interriediary/recipient's bank 240, and intermediary/recipient 250. Asdescribed in FIG. 1, collector 120 receives the payment and disbursementinformation, records the information in a database, and then transmitsthe information to accumulator agency 130. The transmission of thisinformation occurs in the form of an addendum-based financial electronicdata interchange (FEDI) file. Electronic data interchange (EDI)describes the computer to computer exchange of information from oneentity to another using electronic communication, and electronic fundstransfer (EFT) describes the exchange of an electronic payment usingelectronic communication. FEDI is a combination of an EDI disbursementinformation with an EFT electronic payment. Accumulator agency 130receives the FEDI file, verifies the validity of the information in thefile, and then records the information in a database. Following thevalidation of the FEDI file, accumulator agency 130 segregates thepayment information and the disbursement information from the FEDI file.Accumulator agency 130 then sends the payment information to debit-basedpayment processing 140 and the disbursement information toaddendum-based disbursement processing 150.

For the processing of the payment according to FIG. 2,accumulator-agency 130 transmits an EDI addendum tointermediary/recipient 250, with data indicating that a payment has beenmade. Also, accumulator agency 130 transmits an EFT transaction toaccumulator agency's bank 210. Notably, accumulator agency 130 maytransmit any number of EFT transactions to accumulator agency's bank 210for processing. For example, if a payment is due to anintermediary/recipient from 500 entities, accumulator agency 130 maytransmit all 500 payments as one EFT transaction to accumulator agency'sbank 210 for processing. In so doing, accumulator agency 130 not onlyutilizes an efficient means of transmitting an EFT transaction but alsosaves transaction costs by using a single EFT transaction. For example,accumulator agency 130 could transmit this single EFT transactioncontaining 500 payments using the CTX format, which provides for up to9,999 payments.

Once accumulator agency's bank 210 receives the EFT transaction fromaccumulator agency 130, accumulator agency's bank 210 must process eachof the individual debit-based transactions contained within the EFTtransaction. Like accumulator agency 130, accumulator agency's bank 210may also use various EFT formats for processing multiple paymentsthrough ACH 220. ACH 220 is a clearing house for processing financialtransactions through the Federal Reserve system, such as, for example,the National Automated Clearinghouse Association (NACHA).

Following transmission of the payment information to ACH 220, ACH 220then processes the debit-based transactions initiated by accumulatoragency's bank 210. Because these transactions are debit-basedtransactions, ACH 220 performs merely two transactions. First, ACH 220issues a debit against the payor of the payment, and second, ACH 220issues a credit to the recipient of the transaction. Thus, for thedebit-based transactions initiated by accumulator agency's bank 210, ACH220 initiates a debit transaction to collector's bank 230 and a credittransaction to intermediary/recipient's bank 240. Again, like collector120 and accumulator agency 130, ACH 220 may utilize various EFT formatsfor multiple transmissions of these electronic transactions. Once ACH220 has completed these transactions, payment processing has occurred,as intermediary/recipient 250 has received payment inintermediary/recipient's bank 240 from collector 120.

FIG. 3 illustrates an embodiment of an addendum-based disbursementprocessing system consistent with system 100 shown in FIG. 1. As shownin FIG. 3, addendum-based disbursement processing system 300 includesintermediary 310, accumulator agency 130, disbursement 320, paper check322, direct deposit 324, debit deposit 326, and recipient 330. Asdescribed in FIG. 1, collector 120 receives payment and disbursementinformation from initiator 110, records the information in a database,and then transmits the information to accumulator agency 130. Thetransmission of payment and disbursement information occurs via a FEDIfile. Once accumulator agency 130 receives the FEDI file, and followingverification, accumulator agency 130 records the information in adatabase and segregates the payment and the disbursement from the FEDIfile. Accumulator agency 130 then processes the disbursement informationaccording to addendum-based disbursement processing 150.

For the processing of the disbursement according to FIG. 3, intermediary310 initially receives an EDI file from accumulator agency 130, as shownin FIG. 2. This EDI file contains information relating to the paymentmade by initiator 110 and requests instructions regarding thedisbursement. Intermediary 310 then processes the information anddetermines whether a disbursement is to be made. If a disbursement isapproved by intermediary 310, intermediary 310 transmits another EDIfile to accumulator agency 130 with instructions for the disbursement.Accumulator agency 130 then processes disbursement 320. Disbursement 320may include any of a number of several disbursement methods, includingpaper check 322, direct deposit 324, and debit deposit 326. Accumulatoragency 130 processes paper check 322 by the traditional methodology, byprinting and mailing the check to recipient 330. Accumulator agency 130processes direct deposit 324 also through the traditional methods, byissuing the deposit by EFT. Accumulator agency 130 processes debitdeposit 326 through any number of available options by issuing an EFT,including the creation of a debit deposit at a bank operated by a stateagency or the creation of a debit deposit account at a bank operated byaccumulator agency 130. Whatever the methodology for disbursement,according to system 300, disbursement 320 processes a disbursement torecipient 330 according to instructions provided to accumulator agency130 from intermediary 310.

FIG. 4 illustrates a preferred embodiment for a payment and disbursementsystem according to the present invention. System 400 depicts a paymentand disbursement system for transmitting child support obligations froma non-custodial to a custodial parent through an employer. Of course,one skilled in the art will realize many alternative applications forthis system.

As shown in FIG. 4, system 400 anticipates that initiator 110 (in thecase of the preferred embodiment, an employee) has already initiated apayment and disbursement. System 400 thus shows three alternatives forcollector 120 (shown here as employer 410) for initiating a payment anddisbursement consistent with the invention. Employer 410 depictsalternative ways that an employer can initiate a payment anddisbursement for an employee, illustrated as employer 412, employer 414,and employer 416. Employer 412 has only one employee subject to a childsupport obligations, employer 414 has 200 employees subject to childsupport obligations, and employer 416 also has 200 employees subject tochild support obligations. In the case of employer 412, the FEDI filetransmitted from employer 412 to accumulator agency 130 comprises theCCD+ format. As noted above, the CCD+ format provides for an EFTtransaction plus an addendum, but the CCD+ format is limited to oneaddendum per transaction. Thus, employer 414 also utilizes the CCD+format, but due to the limitations of this EFT format, employer 414would be required to use 200 separate FEDI transactions in the CCD +format. In contrast, employer 416 transmits all 200 transactionsutilizing the CTX format. As noted above, the CTX format allows for thetransmission of a payment with up to 9,999addenda records. Employer 416therefore saves both time and expense by using the CTX format. Whateverthe format, once employer 410 transmits the necessary FEDI files,accumulator agency 130 receives the FEDI files from employer 410 andprocesses the payment and disbursement transactions.

For payment processing according to system 400, accumulator agency 130transmits an EDI transaction to state 460 and an EFT transaction toaccumulator agency's bank 210. The EDI transaction from accumulatoragency 130 to state 460 indicates that a payment has been made. The EFT(or FEDI) transaction from accumulator agency 130 to accumulatoragency's bank 210 contains the payment information to initiate a paymentfrom initiator 110 (that is, a non-custodial parent) to recipient 330(that is, custodial parent 480). As depicted in system 400, state 460comprises state A 462, state B 464 and state C 466. System 400 containsthree representations of state 460 for purposes of describing threealternatives for payment and disbursement processing. For similarreasons, system 400 contains three representations of state bank 470,including state A's bank 472, state B's bank 474, and state C's bank476, and accordingly, system 400 contains three representations ofcustodial parent 480, including custodial parent A 482, custodial parentB 484, and custodial parent C 486.

Continuing with payment processing according to system 400, accumulatoragency's bank 210 receives the payment information from accumulatoragency 130 and processes the payment via ACH 220 as a debit-basedtransaction. In processing the debit-based transaction, ACH 220 issues adebit against employer's bank 440 and issues a credit to state bank 470.In this maimer, the payment is completed from initiator 110, or thenon-custodial parent, to state 460 via employer 410 for the benefit ofrecipient 330, or custodial parent 480. The particular steps associatedwith the processes of payment processing are described in connection ofFIGS. 10-16.

For disbursement processing according to system 400, state 460 issues anEDI transaction to accumulator agency 130, authorizing a disbursement tocustodial parent 480. Accumulator agency 130 then processes thedisbursement 320 according to one of three methods, paper check 322,direct deposit 324, or debit deposit 326. As shown in FIG. 4, for adisbursement by paper check, state A 462 transmits an EDI file toaccumulator agency 130, authorizing a disbursement to custodial parent A482. Accumulator agency 130 then prints and issues a check directly tocustodial parent A 482. For a disbursement by direct deposit, state B464 issues an EDI file to accumulator agency 130, authorizing adisbursement to custodial parent B 484. Accumulator agency 130 thenissues an EFT transaction to accumulator agency's bank 210, authorizinga direct deposit to custodial parent B 484. Accumulator agency's bank210 issues an EFT transaction to ACH 220, initiating a direct deposit tocustodial parent B 484. Based on this instruction for a direct deposit,ACH 220 issues a debit transaction against state B's bank 474 and issuesa credit transaction to custodial parent B's bank 490, for the benefitof custodial parent B 484. For a disbursement by debit deposit, state Ctransmits an EDI to accumulator agency 130, authorizing a debit depositto custodial parent C 486. Accumulator agency 130 transmits an EFTtransaction to accumulator agency's bank 210, authorizing the creationof a debit deposit account to the benefit of custodial parent C 486.Accumulator agency's bank 210 issues an EFT transaction to ACH 220,providing for the creation of a debit deposit in state C's bank 476.Once a debit deposit is created in state C's bank 476, custodial parentC 486 may access the account and receive the disbursement. Theparticular steps associated with the processes of disbursementprocessing are described in connection with FIGS. 17-21.

In the payment and disbursement system described in FIG. 4, it should benoted that all the designations are exemplary. One skilled in the artwould be able to recognize various implementations of system 400. Forexample, the reference to a state does not limit the scope of thisinvention to a state of the United States, but in the context of thepreferred embodiment, the reference may apply to any local, regional,federal, or international governmental entity. In other embodiments,moreover, the reference to a state could even apply to a nongovernmentalentity, such as, for example, a mutual fund, a bill payment center, orany other commercial entity. Indeed, all the designations in system 400entail such broad applications in the context of payment anddisbursement processing.

FIG. 5 illustrates one embodiment of collector 120 used in system 100shown in FIG. 1. As shown in FIG. 5, collector 120 preferably includescollector terminal 500 equipped with conventional hardware, includingcentral processing unit (CPU) 510, random access memory (RAM) 512,display memory 514, video interface circuit (VIC) 516, input/outputcontroller (I/O) 518, data storage device (disk) 520, input device 530,display 540, external device 550, and optional network interface 560.Collector terminal 500 basically functions as a conventional dataprocessor.

As shown in FIG. 5, CPU 510 is directly coupled to each of the otherelements of collector terminal 500. CPU 510 executes program code (notshown) stored in one or more RAM 512 or disk 520 to carry out thefunctions and acts described in connection with collector terminal 500.CPU 510 preferably comprises at least one high-speed digital dataprocessor adequate to execute program modules consistent with theinvention, such as accumulation of a payment and disbursement,transmission of a payment and disbursement, and the processing andcompletion of a payment and disbursement. The processes performed bythese modules are described in connection with FIGS. 10-21. CPU 510interacts with RAM 512 and disk 520 to execute stored program codeaccording to conventional data processing techniques.

As also shown in FIG. 5, input device 530 permits collector terminal 500to receive payment and disbursement information about initiator 110 and,although shown as a single device, may comprise one or more data inputdevices of various types, such as an alphanumeric keyboard, a numerickeypad, a bar code scanner, a credit card reader, a disk drive, amemory, an electronic communication line, and a wireless transceiver.Input device 530 preferably transmits received information to CPU 510for storage in disk 520. VIC 516 comprises a video driver sendingsignals to display 540 displaying either text or graphics based on thecontents of display memory 514. Display 540 is preferably large enoughto display information relating to payment and disbursement processingfor initiators 110. External device 550 allows operability of othercomponents with collector 120, such as, for example, a modem, a printer,a scanner, a photocopying device, or any other form of input or outputdevice. Optional network interface 560 links CPU 510 to allowcommunication with other collector devices, such as multiple collectorterminals 500.

As shown in FIG. 5, disk 520 preferably comprises a large capacitymemory capable of maintaining FEDI file database 522 and EDI addendadatabase 524. FEDI file database 522 contains data pertaining to paymentand disbursement information accumulated from initiators 110. Thecontents of FEDI file database 522 are transmitted to accumulator agency130 for processing. EDI addenda database 524 contains the disbursementinformation from FEDI file database 522. Data contained in one or moreof these databases 522 and 524 may be periodically updated fromcollectors 120 via input device 530, external device 550, or optionalnetwork interface 560. Samples of the records and their respectivefields contained in databases 522 and 524 are shown in and described inconnection with FIGS. 8A-8B and 9A-9B.

FIG. 6 illustrates one embodiment of accumulator agency 130 used insystem 100 shown in FIG. 1. Accumulator agency 130 preferably comprisesaccumulator agency server 600 equipped with conventional hardware,including CPU 610, RAM 612, display memory 614, VIC 616, I/O 618, disk620, input device 630, display 640, external device 650, and optionalnetwork interface 660. In general, elements of accumulator agency server600 common to collector terminal 500 preferably operate in substantiallythe same manner as described above. Because accumulator agency server600 may service one or more external devices 650, accumulator agencyserver 600 is preferably capable of interfacing with one or morecollector terminals 500. Alternatively, accumulator agency server 600130 may also interface with one or more collector terminals 500 viaoptional network interface 660.

As shown in FIG. 6, disk 620 preferably comprises a large capacitymemory capable of maintaining FEDI file database 622, EFT debit database624, and EDI addenda database 626. FEDI file database 622 contains datapertaining to the payment and disbursement information transmitted bycollector terminals 500. Indeed, FEDI file database 622 contains datacorresponding to FEDI file database 522. EFT debit database 624 containsthe payment information from FEDI file database 622. EDI addendadatabase 626 contains the disbursement information from FEDI filedatabase 622. Data contained in one or more of these databases 622, 624,and 626 may be periodically obtained and updated from collectorterminals 500 via external device 650 or optional network interface 660.Samples of the records and their respective fields contained indatabases 622, 624, and 626 are shown in and described in connectionwith FIGS. 8A-8B and 9A and 9B.

FIG. 7 illustrates one embodiment of intermediary/recipient 250 used insystem 200 shown in FIG. 2. Intermediary/recipient 250 preferablycomprises intermediary/recipient terminal 700 equipped with conventionalhardware, including CPU 710, RAM 712, display memory 714, VIC 716, I/O718, disk 720, input device 730, display 740, external device 750, andoptional network interface 760. Again, elements ofintermediary/recipient terminal 700 common to collector terminal 500 oraccumulator agency server 600 preferably operate in substantially thesame manner as described above. External device 750 or optional networkinterface 760 allows connectivity of intermediary/recipient terminal 700to external computers or networks. In a preferred embodiment, one suchexternal computer is accumulator agency server 600.

As shown in FIG. 7, disk 720 maintains EDI addenda database 721, EFTcredit database 723, disbursement database 725, initiator database 727,and recipient database 729. EDI addenda database 721 contains theaddendum information transmitted by accumulator agency server 600.Indeed, EDI addenda database 721 contains data corresponding to EDIaddenda database 626. EFT credit database 723 contains the credittransactions transmitted from ACH 220. Disbursement database 725contains information designating whether a disbursement will beauthorized and transmitted to accumulator agency server 600. Initiatordatabase 727 contains a listing of authorized initiators for paymenttransactions. Recipient database 729 contains a listing of theauthorized recipients for the receipt of disbursements. Samples of therecords and their respective fields contained in databases 721, 723,725, 727, and 729 arc shown in and described in connection with FIGS.8A-8B and 9A-9B.

Database Formats

Samples of the contents of FEDI file database 522, EDI addenda database524, FEDI file database 622, EFT debit database 624, EDI addendadatabase 626, EDI addenda database 721, EFT credit database 723,disbursement database 725, initiator database 727, and recipientdatabase 729 are shown in FIGS. 8A-8B and 9A-9B. The specific data andfields illustrated in these figures represent only one embodiment of therecords stored in the databases consistent with the invention. In mostcases, the fields shown in FIGS. 8A-8B and 9A-9B are relatively straightforward and self-explanatory. In addition to the disclosed databases,the data and fields of these databases, as well as the number ofdatabases, can be readily modified from the described embodiments, forexample, to include more or fewer data fields.

FEDI file database 522 maintained in collector terminal 500 contains alisting of information relating to payments and disbursements for use bycollector terminal 500. FIGS. 8A and 8B illustrate a sample of thecontents of FEDI file database 522, with FIG. 8A depicting a sample ofthe contents of a FEDI file in the CCD format and FIG. 8B depicting asample of a FEDI file in the CTX format.

As shown in FIG. 8A, using the CCD format, FEDI file database 522contains eleven fields with data element names corresponding to, forexample, record type code, transaction code, receiving depositoryfinancial institution (DFI) identification, check digit, DFI accountnumber, amount, identification number, receiving company name,discretionary data, addenda record indicator, and trace number. FIG. 8Aalso indicates the attributes of each field. After the field row and thedata element name row, the field inclusion requirement row indicates therequirements for each of the eleven fields, "M" indicating a mandatoryelement, "R" indicating a required element, and "O" indicating anoptional element. The contents row indicates a sample stricture for thecontents of each field, and the link row indicates the length ofcharacters available for each field. Finally, the position row indicatesthe position of the data element in the database record. The CCD formatallows a database record of 94 characters.

For field 1, located at position 01-01, record type code allows a singlecharacter, which the example shows as a "6."

For field 2, located at position 02-03, transaction code encompasses twocharacters, which the example shows as requiring a numeric form.

For field 3, located at position 04-11, receiving DFI identificationprovides for 8 characters, which the example depicts in the form,"TTTTAAAA."

For field 4, located at position 12-12, check digit encompasses a singlecharacter, which the example shows as requiring a numeric form.

For field 5, located at position 13-39, DFI account number entails 17characters, which the example shows as allowing any alphanumeric form.

For field 6, located at position 30-39, amount provides for a characterlength of 10, which the example shows as $$$$$$$$¢¢ (thus, allowing anumerical entry of 999,999.99 or below).

For field 7, located at position 40-54, identification number spans 15characters, which the example shows as allowing any alphanumeric form.

For field 8, located at position 55-76, receiving company nameencompasses 22 characters, which the example shows as allowing anyalphanumeric form.

For field 9, located at position 77-76, discretionary data involves only2 characters, which the example shows as allowing any alphanumeric form.

For field 10, located at position 79-79, addenda record indicator allowsa single character, which the example shows as requiring a numeric form.

For field 11, located at position 80-94, trace number encompasses anumber of up to 15characters, which the example shows as requiring anumeric form.

As shown in FIG. 8B, using the CTX format, FEDI file database 522 mayalso contain thirteen fields with data element names corresponding to,for example, record type code, transaction code, receiving DFIidentification, check digit, DFI account number, total amount,identification number, number of addenda records, receiving companyname/ID number, reserved, discretionary data, addenda record indicator,and trace number. The CTX format also allows a database record of94characters. Indeed, the 13 fields of FIG. 8B correspond to the fieldsdescribed in FIG. 8A, except that FIG. 8B contains two additionalfields, namely, number of addenda records (field 8) and reserved (field10). For field 8, located at position 55-58 of the addenda for the CTXformat, number of addenda records encompasses 4 characters, which theexample shows as requiring a numeric form; for field 10, located atposition 75-76 of the addenda for the CTX format, reserved provides for2 characters, which the example indicates as "blank" due to the reservedstatus of this field. Otherwise, the fields of the CTX format correspondexactly to the fields of the CCD format. Indeed, both the CTX format andthe CCD format contain 94 characters. Accordingly, FEDI file database522 contains fields corresponding to either the CCD or CTX format, andin either case, the number of characters in the database for each recorddoes not exceed 94.

Notably, FIGS. 8A and 8B only depict the fields for the EFT-portion ofthe FEDI file. Accordingly, these fields for the CCD and CTX formatsoperate according to the Operating Rules and Guidelines of the NationalAutomated Clearinghouse Association (NACHA), hereby incorporated byreference.

Also maintained in collector terminal 500, EDI addenda database 524contains a listing of the information relating to disbursements eitherauthorized by or required from initiators 110. As shown in FIGS. 8A and8B, the addenda record indicator (field 10 for CCD, field 12 for CTX)designates the presence or absence of an addenda record in an FEDI file.If this flag is positive, FIG. 9A illustrates a sample of the contentsof such an addenda record. As shown in FIG. 9A, an addenda recordcontains five fields with data element names corresponding to, forexample, record type code, addenda type code, payment relatedinformation, addenda sequence number, and entry detail sequence number.The row structure of the addenda record depicted in FIG. 9A correspondsto the structure and contents of the rows in FIGS. 8A-8B. Of the fivefields shown in FIG. 9A, payment related information (field 3) containsthe pertinent disbursement information, in the context of EDI addendadatabase 524.

FIG. 9B illustrates a sample of the contents of EDI addenda database524, in its preferred implementation of a payment and disbursementprocessing system for child support payments. As shown in FIG. 9B, EDIaddenda database 524 contains records having fields with segmentidentifiers for deductions (DED) corresponding to, for example,application identifier DEDO1, case identifier DED02, pay date DED03,payment amount DED04, non-custodial parent social security number DED05,medical support indicator DED06, non-custodial parent name DED07, FIPScode DED08, an employment termination indicator DEDO9. Therefore, asshown in FIG. 9B, the addenda record for a child support paymentcontains nine segment identifiers.

Application identifier DED01 indicates the type of deduction beingwithheld from an employee's pay.

Case identifier DED02 is the case number or court order number that thechild support receiving agency uses for the processing of payments anddisbursements.

Pay date DED03 indicates the pay date or the date of income withholdingfrom the non-custodial parent.

Payment amount DED04 indicates the amount of withholding from the pay ofthe non-custodial parent, which is paid to the child support receivingagency.

Non-custodial parent social security number DED05 provides the childsupport receiving agency with the social security number of thenon-custodial parent.

Medical support indicator DED06 indicates whether the non-custodialparent has family medical insurance available through his or heremployer.

Non-custodial parent name DED07 indicates the first seven letters of thelast name of the non-custodial parent followed by at least three of thefirst three letters of his or her first name.

Federal information process standard (FIPS) code DED08 refers to thecode used by the child support entity receiving the transaction, usuallyindicating the state and county of the child support entity.

Employment termination indicator DED09 is used to indicate to the childsupport enforcement agency that the non-custodial parent's employmenthas been terminated.

For the contents of an EDI addendum for child support payment anddisbursement, FIG. 9B also indicates the mandatory and permissiveattributes of each field. Attribute column 1 indicates the fieldrequirement, "M" indicating a mandatory element and "O" indicating anoptional element. Attribute column 2 indicates the data type, including"AN" for string type data, "DT" for date type data, "ID" for identifierdata from a predefined list of values, and "N2" indicating a numerictype data with two decimal places to the right of a fixed decimal point(indicating a financial amount). Attribute column 3 indicates theminimum/maximum allowable length for the element, for example,1/20indicates a minimum of one character and a maximum of 20 characters.

Of course, the example of the addenda requirements for a child supportpayment and disbursement are only one implementation of a systemconsistent with the present invention. Other implementations for paymentand disbursement processing may also be used, such as, for example,alimony payments, payments on a judgment, payments on an attachment, taxpayments, or even permissive payments, such as, for example, paymentsfor investments or a mutual fund, payments upon a loan, or any otherform of private or commercial obligation.

FEDI file database 622 maintained in accumulator agency server 600contains a listing of information corresponding to FEDI file database522. FEDI file database 622 contains those FEDI files transmitted toaccumulator agency server 600 by collector terminals 500. Followingtransmission of these FEDI files, accumulator agency server 600 thenvalidates the information, and if valid, segregates the EFT informationfrom the EDI information. EFT debit database 624 contains the EFTinformation obtained from FEDI file database 622, and EDI addendadatabase 626 contains the EDI information obtained from FEDI filedatabase 622. As described above, FIGS. 8A and 8B show samples of EFTinformation, and FIGS. 9A and 9B show samples of EDI information. EFTdebit database 624 and EDI addenda database 626 contain informationconsistent with that shown in and described in connection with FIGS.8A-8B and 9A-9B.

EDI addenda database 721 maintained in intermediary/recipient terminals700 contains a listing of disbursement information corresponding to theEDI information transmitted to intermediary/recipient terminal 700 fromaccumulator agency server 600, which was transmitted to accumulatoragency server 600 from collector terminals 500. EDI addenda database 721contains information similar to that contained within EDI addendadatabase 524 and EDI addenda database 626. FIGS. 9A and 9B show samplesof EDI information. Intermediary/recipient terminal 700 receives EDItransactions into EDI addenda database 721 from accumulator agencyserver 600 in order to process disbursements according to theinformation contained within the EDI addenda.

EFT credit database 723 maintained in intermediary/recipient terminal700 contains information relating to payments processed throughaccumulator agency's bank 210 and ACH 220 for the purpose of laterdistribution and processing. In an implementation pertaining to childsupport, once initiator 110, or a non-custodial parent, has issued apayment through employer 410 to custodial parent 480, EFT creditdatabase 723 indicates to intermediary/recipient terminal 700 (such as aterminal at a state child support agency) that the non-custodial parenthas paid the obligation. Once the payment has occurred,intermediary/recipient terminal 700 may then authorize the disbursementto custodial parent 480.

Disbursement database 725, initiator database 727, and recipientdatabase 729 maintained in intermediary/recipient terminal 700 enableauthorization of disbursements pursuant to the information containedwithin EDI addenda database 721. Initiator database 727 contains alisting of the authorized initiators for payment processing, recipientdatabase 729 contains a listing of the authorized recipients fordisbursement processing, and disbursement database 729 contains alisting of disbursements authorized for processing. EFT credit database723 thus indicates to disbursement database 725 whether a disbursementis authorized. Once a disbursement is authorized under disbursementdatabase 725, intermediary/recipient terminal 700 transmits suchauthorization to accumulator agency server 600. Disbursement database725 may also contain a historical database of prior disbursements. In animplementation pertaining to child support, for example, initiatordatabase 727 would contain a listing of initiators 110, or non-custodialparents, recipient database 729 would contain a listing of custodialparents 480, and disbursement database 729 would contain the informationregarding payments due by the non-custodial parents to custodial parentsfor child support obligations.

Process

In processing a payment and disbursement from collector 120 (such as anemployer) based on an obligation of initiator 110 (such as an employee),the system shown and described in connection with FIG. 1 preferablyexecutes several distinct modules, or processes. These processes includefacilitating the accumulation of a payment and disbursement at collector120 from initiator 110, transmitting the payment and disbursementinformation from collector 120 to accumulator agency 130, processing thepayment via debit-based payment processing 140, and processing thedisbursement via addendum-based disbursement processing 150. The stepsassociated with these processes are described in connection with FIGS.10-21 and can be performed in any order, unless otherwise specified ordictated by the steps themselves.

In describing the processes consistent with the invention, variousimplementations of systems consistent with the invention are alsodescribed herein. For example, FIG. 10 illustrates a payment processingsystem consistent with the preferred embodiment of the invention asshown in FIG. 4. FIGS. 11 and 12 depict flow diagrams illustrating theseries of steps performed by system 1000 as shown in FIG. 10. Ininitiating payment processing pursuant to the preferred embodiment,employer 410 (shown here as employers 412, 414, 416) receives awithholding order from initiator 110 (here, a non-custodialparent/employee), authorizing employer 410 to withhold funds from salaryregarding a child support obligation (step 1110). If employer 410receives a withholding order, the order will involve either a wageassignment income withholding or wage lien from a state agency or courtordering the withholding of funds from the salary of an employeepursuant to a child support obligation. Alternatively, an employee canalso authorize an employer to withhold funds from his or her salary fora child support obligation. Whatever the form of authorization, onceauthorized, the employer converts the withholding obligation into a FEDIfile (step 1120). This FEDI file may contain a payment with addenduminformation regarding disbursement in either the CCD or CTX formats. TheFEDI file preferably is in the CTX format for greater efficiency andcost savings. Following the creation of the FEDI file, the employer thentransmits the FEDI file to accumulator agency 130 (step 1130).

Once accumulator agency 130 receives the FEDI file from employer 410(step 1202), accumulator agency 130 validates the FEDI transmission(step 1205). The validation of the FEDI transmission may includecertification of the employer. In this certification process,accumulator agency 130 determines whether employer 410, whichtransmitted the FEDI file, is registered with accumulator agency 130. Ifemployer 410 is not registered with accumulator agency 130, the FEDIfile is rejected (step 1210). If employer 410 is registered withaccumulator agency 130, employer 410 is certified and processing of theFEDI file continues. Note that this certification step is only one ofmany possible certification steps pursuant to methods consistent withthe invention. Other certification steps may include, for example,validation of the data contained within the FEDI file.

Following certification of the employer, accumulator agency 130initiates two transmissions. On the one hand, accumulator agency 130sends an EDI file to state 460 (shown here as state A 462, state B 464,and state C 466) (step 1220). This EDI file indicates to state 460 thata payment has been made by initiator 110 (or, an employee) via employer410. Once state 460 receives the EDI file, state 460 uses theinformation contained within the addendum and updates its recordspertaining to the payment by the employee (step 1230). On the otherhand, accumulator agency 130 also periodically accumulates EFT files forsubsequent transmission (step 1240). Accumulator agency 130 preferablytransmits EFT files by the use of a FEDI file. For example, using theCTX format, accumulator agency 130 can accumulate 9,999 EFT paymenttransactions for transmissions in a single FEDI file. Once accumulatoragency 130 has created such a FEDI file, the file is transmitted toaccumulator agency's bank 210 (step 1250).

Upon receipt of the FEDI file from accumulator agency 130, accumulatoragency's bank 210 processes the payment transactions (step 1260). Ifaccumulator agency 130 transmitted a FEDI file, accumulator agency'sbank 210 segregates and processes the payments, but if accumulatoragency 130 transmitted a single EFT file, then accumulator agency's bank210 simply processes the single payment transaction. Once accumulatoragency's bank 210 has accumulated and processed the payment transactionsreceived from accumulator agency 130, accumulator agency's bank 210 theninteracts with ACH 220. As done by accumulator agency 130, accumulatoragency's bank 210 may also utilize FEDI when transacting with ACH 220.Thus, accumulator agency's bank may periodically accumulate and transmitpayment transactions in the form of a FEDI file in the CTX format to ACH220

Once ACH 220 receives the payment transaction information fromaccumulator agency's bank 210, ACH 220 processes the payments asdebit-based transactions. Accordingly, ACH 220 processes the payments asdebit-based transactions by transmitting a debit transaction toemployer's bank 440 (step 1280) and transmitting a credit transaction tostate bank 470 (step 1270), such as, state A's bank 472, state B's bank474, and state C's bank 476. Following the processing of thesetransactions by ACH 220, the payment obligation from employer's bank 440is satisfied with regard to state 460, for example, including state 463,state 464 and state 466.

Although the system and processes described by FIGS. 10-12 describe thepreferred embodiment for the payment processing system shown in FIG. 4,other implementations are also available. FIG. 13, for example,illustrates an alternative embodiment for a payment processing systemconsistent with the invention. FIGS. 14-15 depict flow diagramsillustrating the series of steps performed by system 1300 as shown inFIG. 13. Similar to system 1000 in FIG. 10 and the processes describedin FIGS. 11-12, system 1300 allows collectors 120 (shown here ascollector 1312, collector 1314, and collector 1316) to transmit paymentinformation to accumulator agency 130 in alternative methods (step1410). In contrast to the system and methods described in FIGS. 10-12,the system and methods consistent with this embodiment do not limitcollector 120 to an employer. Otherwise, system 1300 and the associatedmethods operate similarly as system 1000 and its associated methods.Collectors 120 create a FEDI file (step 1420) and transmit the FEDI fileto accumulator agency 130 (step 1430). Accumulator agency 130 thenreceives the FEDI file from collectors 120 (step 1502) and performscertification (step 1505).

If certification fails, the FEDI file is rejected (step 1510). Ifcertification passes, accumulator agency 130 performs two steps. First,accumulator agency 130 sends an EDI file to intermediary/recipient 250(step 1520). Upon receipt of the EDI file, intermediary/recipient 250updates its records regarding the payment described in the EDI file(step 1530). In contrast to the system and methods described in FIGS.10-12, the system and methods consistent with this embodiment do notlimit intermediary/recipient 250 to a state. However, to show thatpayment transaction can be processed to multiple recipients, system 1300distinguishes intermediary/recipients 1322, 1324, 1326. Second,accumulator agency accumulates EFT files from the FEDI files receivedfrom collectors 120 and periodically creates combined FEDI files forlater transmission (step 1540). Accumulator agency 130 then transmitsthe FEDI file to accumulator agency's bank 210 (step 1550). Accumulatoragency's bank 220 then receives the FEDI file from accumulator agency130 and processes the payment as a debit-based transaction via ACH 220(step 1560). ACH 220 subsequently performs two transactions: ACH 220processes a debit transaction to collector's bank 1310 (step 1580) andtransmits a credit transaction to intermediary/recipient's bank 240,here designated as intermediary/recipient A's bank 1332,intermediary/recipient B's bank 1334, and intermediary/recipient C'sbank 1336 (step 1570). Following these transactions, the paymentobligation from intermediary/recipient's bank 240 is satisfied withregard to intermediary/recipient 250, for example, includingintermediary/recipient A 1322, intermediary/recipient B 1324, andintermediary/recipient C 1326.

As described above, the system and methods associated with FIGS. 13-15provide for a more dynamic payment processing system than the system andmethods associated with FIGS. 10-12. The system and methods consistentherewith allow for payment processing of mandatory as well as permissiveobligations. Also, the system and methods consistent herewith allow forpayment processing from entities other than non-custodial parents,through entities other than states, and to entities other than custodialparents.

FIG. 16 illustrates another alternative embodiment for a paymentprocessing system consistent with the invention. Similar to system 1300,described in FIG. 13, system 1600 operates in the same manner as thesystem and methods disclosed in FIGS. 13-15, except system 1600 allowsaccumulator agency 130 to transact directly with ACH 220. In short,system 1600 allows accumulator agency 130 to function as a bank.

In system 1600, collectors 120 (here shown as collector 1312, collector1314, and collector 1316) transmits payment information to accumulatoragency 130. Once accumulator agency 130 receives the FEDI file fromcollectors 120, following certification, accumulator agency 130 thensends an EDI file to intermediary/recipient 250, and accumulator agency130 sends an FEDI file to a ACH 220. Notably, in contrast to the systemand methods described by FIGS. 10-15, the system and methods consistentwith FIG. 16 allow accumulator agency 130 to transact directly with ACH220. In this manner, accumulator agency 130 functions as a bank.Following the transactions between ACH 220 and accumulator agency 130,ACH 220 processes the payments as debit-based transactions. In so doing,ACH 220 processes a debit transaction to collector's bank 1310 andtransmits a credit transaction to intermediary/recipient's bank 240.Like the system and methods consistent with the embodiment of theinvention associated with FIGS. 13-15, the system and methods consistentwith FIG. 16 also provide for a more dynamic payment processing system.By allowing accumulator agency 130 to transact directly with ACH 220,transaction steps are omitted that allow for a more efficient and thustimely processing of payments. Of course, the omission of this one stepincludes but one of many changes that can be made to the systems andmethods for payment processing consistent with the invention.

FIG. 17 illustrates a disbursement processing system consistent with thepreferred embodiment of the invention as shown in FIG. 4. FIG. 18depicts a flow diagram illustrating the series of steps performed bysystem 1700 as shown in FIG. 17. In transacting disbursement processingpursuant to the preferred embodiment, state 460 (here shown as state A462, state B 464, and state C 466) computes the child supportdisbursement due to recipient 330 and transmits the disbursementinformation in an EDI file to accumulator agency 130 (step 1810).Accumulator agency 130 receives the EDI file from state 460 andprocesses the disbursement (step 1820). If the disbursement is a check(step 1825), accumulator agency 130 prints the check and transmits itdirectly to custodial parent 480 (step 1830). In system 1700, theissuance of a check by accumulator agency 130 is transmitted tocustodial parent A 482. The issued check is drawn on the bank account ofstate 460. In system 1700, the check issued by accumulator agency 130 tocustodial parent A 482 is drawn on state A's bank 472 (step 1835).

If the disbursement is not a check, accumulator agency 130 must processan electronic transaction for the disbursement (step 1840). To do so,accumulator agency 130 issues an EFT/FEDI transaction to accumulatoragency's bank 210 (step 1842) and accumulator agency's bank thentransmits the transaction to ACH 220 (step 1845). ACH 220 then transmitsthe EFT/FEDI transaction to state bank 470 (step 1850). If the EFT/FEDItransaction is for a direct deposit (step 1855), state bank 470subsequently issues a direct deposit via ACH 220 (step 1860). In system1700, the issuance of a direct deposit by accumulator agency 130 resultsin the transmission of a direct deposit to ACH 220. ACH 220 thenprocesses the direct deposit to custodial parent B's bank 490. In sodoing, ACH 220 issues a debit transaction to state B's bank 474 (step1866) and issues a credit transaction to custodial parent B's bank 490(step 1867). Thereby, custodial parent B 484 receives a disbursement inthe form of a direct deposit (step 1868).

If disbursement is not by direct deposit, accumulator agency 130processes the disbursement as a debit deposit (step 1870). Inestablishing a debit deposit, accumulator agency 130 has the option ofwhere to locate the debit deposit account. In system 1700, accumulatoragency 130 establishes the direct deposit account at state C's bank 476,by transmitting the debit deposit information via ACH 220. Thereby,custodial parent C 486 receives the disbursement in the form of a debitaccount at state C's bank 476 (step 1880). Alternatively, accumulatoragency 130 can also establish a debit deposit account at accumulatoragency's bank 210. Additionally, although not depicted in FIG. 18, thesystem and methods consistent with the preferred embodiment alsocontemplate the issuance of an invoice to custodial parent 480 for anydisbursement (as indicated by the dotted line on FIG. 17).

Although the system and processes described by FIGS. 17-18 describe thepreferred embodiment for the disbursement processing system shown inFIG. 4, other implementations are also available. FIG. 19, for example,illustrates an alternative embodiment for a disbursement processingsystem consistent with the invention. FIG. 20 depicts a flow diagramillustrating the series of steps performed by system 1900 as shown inFIG. 19. Similar to system 1700 in FIG. 17 and the processes describedin FIG. 18, system 1900 enables intermediary 310 to compute a paymentdue to recipient 330 and to transmit the disbursement information in anEDI file to accumulator agency 130 (step 2010). In contrast to thesystem and methods described in FIGS. 17-18, the system and methodsconsistent with this embodiment do not limit intermediary 310 to astate. Otherwise, system 1900 and the associated methods operatesimilarly as system 1700 and its associated methods. Accumulator agency130 receives the EDI file from intermediary 310 and processes thedisbursement (step 2020). If the disbursement is a check (step 2025),accumulator agency 130 prints the check and transmits it directly torecipient 330 (step 2030). Again, in contrast to the system and methodsdescribed in FIGS. 17-18, the system and methods consistent with thisembodiment do not limit recipient 330 to a custodial parent. However, toshow that multiple disbursement transaction can be processed to multiplerecipients, system 1900 distinguishes recipient A 1932, recipient B1934, and recipient C 1936. As indicated in system 1900, the issuance ofa check by accumulator agency 130 is transmitted to recipient A 1932.The issued check is drawn on the bank account of intermediary A's bank1912. In system 1900, the check issued by accumulator agency 130recipient A 1932 is drawn on intermediary A's bank 1912 (step 2035).

If the disbursement is not a check, accumulator agency 130 must processan electronic transaction for the disbursement (step 2040). To do so,accumulator agency 130 issues an EFT/FEDI transaction to accumulatoragency's bank 210 (step 2042) and accumulator agency's bank thentransmits the transaction to ACH 220 (step 2045). ACH 220 then transmitsthe EFT/FEDI transaction to intermediary/recipient's bank 240 (step2050). If the EFT/FEDI transaction is for direct deposit (step 2055),intermediary/recipient bank 240 subsequently issues a direct deposit viaACH 220 (step 2060). In system 1900, accumulator agency 130 issues adirect deposit to ACH 220, which results in the transmission of a directdeposit to intermediary B's bank 1914, which transacts with ACH 220 toprocess the direct deposit to recipient B's bank 1920. In so doing, ACH220 issues a debit transaction to intermediary B's bank 1914 (step 2066)and issues a credit transaction to recipient B's bank 1920 (step 2067).Thereby, recipient B 1934 receives a disbursement in the form of adirect deposit (step 2068).

If disbursement is not by direct deposit, accumulator agency 130processes the disbursement as a debit deposit (step 2070). Similar tothe system and methods described in FIGS. 17-18, in establishing a debitdeposit, accumulator agency 130 has the option of where to locate thedebit account. In system 1900, accumulator agency 130 establishes thedirect deposit account at intermediary C's bank 1916, by transmittingthe direct deposit information via ACH 220. Thereby, recipient C 1936receives the disbursement in the form of a debit account at intermediaryC's bank 1916 (step 2080). Alternatively, accumulator agency 130 canestablish a debit deposit account at other locations, includingaccumulator agency's bank 210. Finally, although not depicted in FIG.20, the system and methods consistent with this embodiment alsocontemplate the issuance of an invoice to recipient 330 for anydisbursement (as indicated by the dotted line on FIG. 19).

As described above, the system and methods associated with FIGS. 19-20provide for a more dynamic disbursement processing system than thesystem and methods associated with FIGS. 17-18. The system and methodsconsistent herewith allow for disbursement processing for mandatory aswell as permissive obligations. Also, the system and methods allow fordisbursement processing from entities other than non-custodial parents,through entities other than states, and to entities other than custodialparents.

FIG. 21 illustrates another alternative embodiment for a disbursementprocessing system consistent with the invention. Similar to system 1900described in FIG. 19, system 2100 operates in the same manner as thesystem and methods disclosed in FIGS. 19-20, except system 2100 allowsaccumulator agency 130 to transact directly with ACH 220. In short,system 2100 allows accumulator agency 130 to function as a bank.

In system 2100 intermediary 310 (here shown as intermediary A 1912,intermediary B 1914, and intermediary C 1916) computes the disbursementdue to recipient 330 and transmits the disbursement information in anEDI file to accumulator 130. Accumulator agency 130 receives the EDIfile from intermediary 310 and processes the disbursement. If thedisbursement is a check, accumulator agency 130 issues the checkconsistent with the system and methods disclosed for system 1700 inFIGS. 19-20.

If the disbursement is not a check, accumulator agency 130 processes anelectronic transaction for the disbursement by issuing an EFT/FEDItransaction directly to ACH 220. Notably, in contrast to the system andmethods described by FIGS. 17-20, the system and methods consistent withFIG. 21 allow accumulator agency 130 to transact directly with ACH 220.In this manner accumulator agency 130 functions as a bank. If theEFT/FEDI transaction is for a direct deposit, accumulator agency 130issues a direct deposit via ACH 220. In system 2100, accumulator agency130 issues a direct deposit to ACH 220, and in so doing, issues a debittransaction to accumulator agency 130 and issues a credit transaction torecipient B's bank 1920. Thereby, recipient B 1934 receives adisbursement in the form of a direct deposit. Alternatively, if thedisbursement is not by direct deposit, accumulator agency 130 processesthe disbursement as a debit deposit. In establishing a debit deposit,accumulator agency 130 establishes a direct deposit account directly ataccumulator agency 130. Thereby, accumulator agency 130 merely instructsrecipient 1936 that a debit deposit account has been formed for itsbenefit. Although not depicted in FIG. 21, the system and methodsconsistent with this embodiment also contemplate the issuance of aninvoice to recipient 330 for any disbursement (as indicated by thedotted line on FIG. 21).

Just as FIG. 16 describes a more dynamic payment processing systemconsistent with the invention by allowing accumulator agency 130 tofunction as a bank, the system and methods consistent with FIG. 21enable the same advantages for a disbursement processing system. Byallowing accumulator agency 130 to transact directly with ACH 220,transaction steps are omitted that allow for a more efficient and timelyprocessing of disbursements. Of course, the omission of this one stepincludes but one of many changes that can be made to the systems andmethods for disbursement processing consistent with the invention.

CONCLUSION

The systems consistent with the invention provide for more efficient andmore economical methods for the processing of either or both paymentsand disbursements. The systems process payments using debit-based EFTand processes disbursements using addendum-based EDI. This improvedpayment and disbursement methodology provides many advantages over thecurrent payment and disbursement technologies.

As described above, it will be apparent to those skilled in the art thatvarious modifications and variations can be made in the processes of thepresent invention without departing from the spirit and scope of theinvention. Thus, it is intended that the present invention cover themodifications and variations of this invention, provided they comewithin the scope of the appended claims and their equivalents. In thiscontext, equivalents means each and every implementation for carryingout the functions recited in the claims, even if not explicitlydescribed herein.

What is claimed is:
 1. A method of accumulating a payment and processinga disbursement comprising the steps, performed by a processor,of:instituting the payment with disbursement information from anemployee to a recipient through an employer; transferring to anaccumulator agency the payment and the disbursement information from theemployer; initiating by the accumulator agency the payment through abank as a debit transaction; transmitting by the accumulator agency thedisbursement to a state as a first addendum transaction; receiving atthe accumulator agency disbursement transaction information from thestate regarding the disbursement to the recipient as a second addendumtransaction; and executing by the accumulator agency the disbursement tothe recipient.
 2. The method of claim 1, further comprising the stepof:issuing an invoice for the disbursement to the recipient.
 3. Themethod of claim 1, wherein the payment is a child support payment. 4.The method of claim 1, wherein the payment is an alimony payment.
 5. Themethod of claim 1, wherein the payment is a payment on a judgment. 6.The method of claim 1, wherein the payment is a payment on anattachment.
 7. The method of claim 1, wherein the employee is anoncustodial parent.
 8. The method of claim 1, wherein the recipient isa custodial parent.
 9. The method of claim 1, wherein the executing stepfurther includes the substep of paying the recipient via one of papercheck, direct deposit, and debit deposit.
 10. A system for accumulatinga payment and processing a disbursement comprising:an institutingcomponent configured to institute the payment with disbursementinformation from an employee to a recipient through an employer; a firsttransferring component configured to transfer to an accumulator agencythe payment and the disbursement information from the employer; aninitiating component configured to initiate by the accumulator agencythe payment through a bank as a debit transaction; a second transmittingcomponent configured to transmit by the accumulator agency thedisbursement to a state as a first addendum transaction; a receivingcomponent configured to receive at the accumulator agency disbursementtransaction information from the state regarding the disbursement to therecipient as a second addendum transaction; and an executing componentconfigured to execute by the accumulator agency the disbursement to therecipient.
 11. The system of claim 10, further comprising:an issuingcomponent configured to issue an invoice for the disbursement to therecipient.
 12. The system of claim 10, wherein the payment is a childsupport payment.
 13. The system of claim 10, wherein the payment is analimony payment.
 14. The system of claim 10, wherein the payment is apayment on a judgment.
 15. The system of claim 10, wherein the paymentis a payment on an attachment.
 16. The system of claim 10, wherein theemployee is a noncustodial parent.
 17. The system of claim 10, whereinthe recipient is a custodial parent.
 18. The system of claim 10, whereinthe executing component further includes a paying component configuredto pay the recipient via one of paper check, direct deposit, and debitdeposit.
 19. A method of processing a payment comprising the steps,performed by a processor, of:withholding by an employer a portion of anemployee's salary for the payment; sending from the employer the paymentto an accumulator agency; initiating by the accumulator agency thepayment through a bank as a debit transaction; and executing the paymentfrom the bank through an ACH as a second debit transaction.
 20. Themethod of claim 19, further comprising the step of:processing thepayment from the ACH to an employer's bank as a third debit transaction.21. The method of claim 19, further comprising the step of:dispatching acredit reflecting the payment from the ACH to an intermediary's bank forthe benefit of an intermediary.
 22. The method of claim 21, wherein thesending step occurs by an addendum-based FEDI transaction.
 23. Themethod of claim 22, wherein the FEDI transaction comprises a cashconcentration or disbursement plus addenda (CCD+) payment format. 24.The method of claim 22, wherein the FEDI transaction comprises acorporate trade exchange (CTX) payment format.
 25. The method of claim21, wherein the initiating step occurs by a debit-base EFT transaction.26. The method of claim 21, wherein the initiating step occurs by anaddendum-based FEDI transaction.
 27. The method of claim 21, wherein thepayment is a child support payment.
 28. The method of claim 21, whereinthe payment is an alimony payment.
 29. The method of claim 21, whereinthe payment is a payment on a judgment.
 30. The method of claim 21,wherein the payment is a payment on an attachment.
 31. The method ofclaim 21, wherein the employee is a noncustodial parent.
 32. The methodof claim 21, wherein the recipient is a custodial parent.
 33. The methodof claim 21, wherein the intermediary is a state.
 34. A system forprocessing a payment comprising:a withholding component configured towithhold by an employer a portion of an employee's salary for thepayment; a sending component configured to send from the employer thepayment to an accumulator agency; an initiating component configured toinitiate by the accumulator agency the payment through a bank as a debittransaction; and an executing component configured to execute thepayment from the bank through an ACH as a second debit transaction. 35.The system of claim 34, further comprising:a processing componentconfigured to process the payment from the ACH to an employer's bank asa third debit transaction.
 36. The system of claim 34, furthercomprising:a dispatching component configured to dispatch a creditreflecting the payment from the ACH to an intermediary's bank for thebenefit of an intermediary.
 37. The system of claim 36, wherein thesending component occurs by an addendum-based FEDI transaction.
 38. Thesystem of claim 37, wherein the FEDI transaction comprises a cashconcentration or disbursement plus addenda (CCD+) payment format. 39.The system of claim 37, wherein the FEDI transaction comprises acorporate trade exchange (CTX) payment format.
 40. The system of claim36, wherein the initiating component occurs by a debit-based EFTtransaction.
 41. The system of claim 36, wherein the initiatingcomponent occurs by an addendum-based FEDI transaction.
 42. The systemof claim 36, wherein the payment is a child support payment.
 43. Thesystem of claim 36, wherein the payment is an alimony payment.
 44. Thesystem of claim 36, wherein the payment is a payment on a judgment. 45.The system of claim 36, wherein the payment is a payment on anattachment.
 46. The system of claim 36, wherein the employee is anoncustodial parent.
 47. The system of claim 36, wherein the recipientis a custodial parent.
 48. The system of claim 36, wherein theintermediary is a state.